Chinese Refiners Increase Chemical Feedstocks Amid Covid-19

• Naphtha and also LPG supply dramatically greater year-on-year
• Gas supply went back to growth in July.

The supply of petrochemical feedstocks in China has proven resilient throughout the Covid-19 need shock.

Refinery result of petrochemical feedstocks, such as naphtha as well as LPG, raised 8% year-on-year in 1H 2020. This contrasts to an 11% year-on-year decrease in total outcome for fuel, diesel as well as jet fuel.

Naphtha and LPG output has been enhanced by enhanced need for them in downstream chemical products. There has actually been a significant enhanced in intake of single-use plastics and product packaging since the begin of the pandemic. Chemical as well as polymer producers have increase run prices in feedback to healthy margins.

The recovery in gas demand has actually remained in sharp comparison. Fuel result returned to year-on-year development just in July, while jet fuel output is still down 25% year-on-year. Diesel need has recovered fairly quicker as commercial activity rebounded.

We anticipate incorporated fuels and petrochemical refiners, such as Hengli as well as Zhejiang Petrochemical, to have weathered the 2020 shock far better than standalone refiners.